Harold Co. reported the following current year purchases and sales data for its only product.
|
Date |
Activities |
Units Acquired at Cost |
|
Units Sold at Retail |
|
Jan. 1 |
Beginning inventory |
100 units @ $10 = |
$ 1,000 |
|
|
Jan. 10 |
Sales |
|
|
90 units @ $40 |
|
Mar. 14 |
Purchase |
250 units @ $15 = |
3,750 |
|
|
Mar. 15 |
Sales. |
|
|
140 units @ $40 |
|
July 30 |
Purchase |
400 units @ $20 = |
8,000 |
|
|
Oct. 5 |
Sales |
|
|
300 units @ $40 |
|
Oct. 26 |
Purchase |
600 units @ $25 = |
15,000 |
|
|
|
Totals
|
1,350 units
|
$27,750
|
530 units
|
Harold uses a perpetual inventory system. Determine the costs assigned to ending inventory and to cost of goods sold using (a) FIFO and (b) LIFO. Compute the gross margin for each method.